Zcash's native token, ZEC, has extended its remarkable rally, reaching its highest level in years. The cryptocurrency climbed to $1,620, representing a staggering 2,800% gain over the past 12 months. This surge has propelled Zcash's market capitalization to $27.2 billion, making it the ninth-largest cryptocurrency and overtaking prominent tokens such as Dogecoin, Hyperliquid, Chainlink, and Cardano.
ETF inflows accelerate
A primary catalyst behind Zcash's price surge is the growing demand for ZEC exchange-traded funds (ETFs). Data from SoSoValue indicates that the Grayscale Zcash ETF added over $32.8 million in assets on Tuesday alone, bringing the week's total increase to $35 million. The fund, which carries a 2.5% expense ratio, has attracted $284 million in inflows this month, following $21 million in the previous month. Its total assets now stand at $979 million, surpassing other altcoin ETFs.
Further boosting demand, 21Shares has launched Europe's first Zcash ETF on Euronext, providing retail and institutional investors with additional exposure to the token. This development is expected to sustain the inflow momentum.
Shielded supply rises
Beyond ETF flows, Zcash is experiencing organic demand growth. According to Blockworks, the number of shielded ZEC tokens—those using privacy features—rose to 4.91 million, the highest level since May 25. This marks a significant recovery from the June low of 4.38 million. The increase in shielded supply signals that users are increasingly turning to privacy-focused cryptocurrencies.
Zcash is the largest privacy token globally, utilizing zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) technology. This allows users to verify transactions without revealing sender, recipient, or amount details. While public transactions display all information, shielded transactions offer enhanced privacy, appealing to a growing segment of crypto users.
Market dynamics and technical outlook
The rally has also been amplified by fear of missing out (FOMO), with daily trading volume exceeding $2 billion and futures open interest spiking. However, technical analysis reveals potential warning signs. The daily chart shows ZEC trading above all major moving averages, a bullish indicator, but the Relative Strength Index (RSI) has slipped from 88 to 72, and the Percentage Price Oscillator (PPO) has formed a bearish divergence. These signals suggest the token may experience a short-term pullback to test support at $1,288 before potentially rallying toward $2,000.
Investors should note that while the fundamentals remain strong, the market's volatility and technical overextension could lead to corrections. As always, thorough research and risk management are essential.
This article is for informational purposes only and does not constitute financial advice.
